And he kicked off the festivities Monday night with the arrival of Gandalf the Grey, Ian McKellen.

To honor the theme, the studio was transformed into a replica Hobbit hole and the opening credits were re-tooled to be reminiscent of a map of Middle-earth, complete with Smaug Street, Green Witch Village, Mordhattan and the Mutton Packing District.

The show has also been temporarily re-named to 'The Pundit: Or Colbert and Back Again.' (For you non-nerds, that's a play on the full title of 'The Hobbit: Or There and Back Again.')

When Colbert was done trolling about whether or not he will actually make that rumored cameo in the 'Hobbit' trilogy and throwing obscure 'Silmarillion' jokes at the audience, it was time for his interview with Sir Ian. And Sir Ian's purple and black striped socks of awesome.

The pair discussed everything from gay rights (which Colbert said McKellen makes “look heroic”) to once again portraying a wizard. McKellen admitted that he prefers playing Gandalf the Grey over Gandalf the White because he drinks, smokes and tells jokes. Basically, he's high or inebriated 24/7.

They also had a much expected nerd-off with Colbert pwning McKellen with his knowledge of the 'Lord of the Rings' universe, while McKellen discussed things he was more comfortable with -- specifically, who'd win in a fight: Gandalf or Magneto.

As McKellen explained, "Gandalf is more powerful than Magneto ... He's 7,000 years old. He knows it all."

We also learned that in the next film McKellen claims Gandalf the Grey will become Gandalf the Gay and we'll get to "find out who his favorite dwarf is." (Pretty sure someone somewhere is already writing the porn script for that one.)